What ‘good business’ means

Interview Alison Taylor

“There is a kind of collective confusion, we have no agreement on what it means to be a good business anymore. We don’t even have good words to talk about these subjects.

Alison Taylor is a clinical associate professor at NYU Stern School of Business, and the executive director at Ethical Systems. She has written a book about the new landscape for business ethics, for Harvard Business Review Press called Higher Ground.

With ideas changing on what it means to be a good business, Alison Taylor says we need collective agreements on what is good and what is bad. And we need the right words to talk about these subjects.

We talk about what is needed to be an ethical organisation, which according to her doesn’t exist without employee participation, understanding and belief that speaking up lines are actually real – and not just performance the senior leadership is putting on.

In fact, she sees a huge expansion in what employees want in terms of raising their voice, making their opinions felt having a role in shaping the values and priorities of the organization. So, why are organizations not responding very well tot his? And what should they be doing?

Listen to the full interview with Alison Taylor and get best practices of organisations who are actually seeing the advantage of including employee voice and employee opinions.

Alison’s previous work experience includes being a Managing Director at non-profit business network Business for Social Responsibility and a Senior Managing Director at Control Risks. She holds advisory roles at ESG and risk consultancy Wallbrook and sustainability non-profit Business for Social Responsibility.

She has expertise in strategy, sustainability, political and social risk, culture and behavior, human rights, ethics and compliance, stakeholder engagement, anti corruption and professional responsibility. Alison received her Bachelor of Arts in Modern History from Balliol College, Oxford University, her MA in International Relations from the University of Chicago, and MA in Organizations Psychology from Columbia University.

https://www.ethicalsystems.org

Twitter: @FollowAlisonT

Selected links from episode

Re_generation Canada - Canada’s largest platform to inspire youth in sustainability

Clean Creatives - A movement of advertisers and clients cutting ties with fossil fuels.

Undercover Activist - A learning hub for employee-led change.

Transcript

↓ Write transcript below this line ↓

Tessa Wernink

Welcome, Alison Taylor, It's such a pleasure to have you in the show.

00:00

Alison Talyor

Thank you so much for having me.

00:06

Tessa Wernink

So, you have a lot of hats on! I like your LinkedIn profile description of an executive director and adjunct professor. With “lots of hats and even more opinions”. So I'm really pleased to be able to be speaking to you today. But before we start, I thought it would be nice if you could introduce yourself to our audience and tell us a little bit about who you are and what you do.

00:09

Alison Talyor

So, I'm a clinical professor at NYU Stern School of Business as of January 1st, 2023, and I am also the Executive Director of Ethical Systems, which is a sort of research collaboration also based at Stern, and then I have a lot of other advisory roles, many to non profits, some to sustainability for profits, some on sustainability issues to corporations. I'm involved also with the Global Future Council for the World Economic Forum on the future of good governance.

00:37

Tessa Wernink

Amazing. Sometimes people say to me: Where do you find the time? But where do you find the time?

01:15

Tessa Wernink

I don't know. I forgot to mention that I'm writing a book and life will be much better once I finished that. So, should be done sometime in 2023 as well.

01:20

Tessa Wernink

And what's the book you're writing about?

01:31

Alison Talyor

Well, I, it's about what I would say is a kind of collective confusion, which is that we have no idea and no agreement on what it means to be a good business anymore. I mean, a business that does the right thing. It used to be seen in quite simple terms as being just a case of not breaking the law. It clearly isn't that anymore, but we don't have a very good, collective agreement on what is good and what is bad. And what's interesting is we don't even have very good words to talk about these subjects. So we talk about ethics. A lot of people don't like it. People associate it with compliance. And then we've got jargony acronyms like ESG. And so, even if you try and have a clear, straightforward conversation, one big problem is that first of all, you've got to wade through a thicket of jargon before you can even get to the point. And so, I am trying, to clear up some Some of that, that's a, a big ambition and I expect to only get a modest way forward, but I'm trying to talk about that question.

01:34

Tessa Wernink

Yeah. Nice. I'd love to hear more about this, ethical functioning of organizations, um, because that's, I think what's happening, who's, who's holding whom to account when it comes to the way, organizations function. And we do obviously a lot on employee activism. So, but I wanted to do just before we go and dive into the, I don't know. I was wondering what activism is to you, maybe, whether you consider yourself an activist.

02:39

Alison Talyor

I certainly, I think, have a lot of the personality traits of an activist. I think an activist is trying to drive change. They're trying to drive change via, perhaps a more confrontational approach than someone that's trying to work. Within systems and drive change more incrementally. I think activists try and challenge the status quo. They try to challenge the dominant paradigm and they try to drive change via creating these challenges and providing momentum behind them. So I think it's a very interesting idea and the whole ecosystem of responsible business activists play a huge role. Those are the questions I'm interested in. Um, so I'm more of a consultant, probably. I've worked, though, enough within existing systems, trying to change them from within, to probably at this point in life, thinking of myself as more of an activist and more that my role is being able to say things that other people might struggle to say because of what they do or where they sit, for example.

03:09

Tessa Wernink

And what, what actually was the, I guess, maybe there wasn't one trigger, but why do you do what you do? What is this thing that you stand for, and made you get to do things on ethical organizations?

04:20

Alison Talyor

Well, I got interested in these topics because of the complexity. I was doing jobs. To earn money first as an investigator. Um, I also worked in political risk consulting, and then I worked as a sustainability consultant. And I took all these jobs because I thought I needed money. And I thought I needed a job. And I was young and I had debts to pay back and then, in these roles, I started asking lots of questions about how organizations think and function and why we have a lot of very persistent problems like climate change is getting worse. Senior leadership teams are still dominated by middle aged white men. We seem to talk a lot, and it seems that a lot of people want change and want business to be better, but we seem to be struggling to realize those goals. So, I started to ask questions about why this is, and that took me in a lot of very different and interesting, directions. Yeah, and I love this thing with ethical systems. When I read it, a lot of it is about systems thinking and psychology, putting an economic together.

04:36

Tessa Wernink

You work in different countries. Can you, can you paint the landscape just from that perspective of maybe as an academic, as a consultant?

05:39

Alison Talyor

It is globally the same problems in organizations that you perceive happening when it comes to how to operate in an ethical way? Well, the last decade or so, I have been mainly living and working in the U.S. So, I certainly have the strongest and deepest view of what business is like in the U. S. and the U. K. originally, though I haven't lived there for quite a while. But certainly I've managed teams, in Latin America, in Central America, in the Middle East and Africa. Um, I've done some work in Asia, but but less so. And for sure we can say, right, that how we think about leadership and organizations, and management and decision making varies enormously across cultures. You can see that even in something as simple as different as to how different societies and governments have responded to the pandemic. I think that the tensions and the questions around what it means to be an ethical business, tensions around making money versus doing the right thing, tensions between top down versus bottom up decision making all exist everywhere in the world. They just take very, very different forms.

06:14

Tessa Wernink

Yeah. Would you like to say more about what Ethical Systems does or do we, do we feel like it’s understood?

07:22

Alison Talyor

Sure. So, Ethical Systems was founded in 2011 by Jonathan Haidt, who is a very famous social psychologist. You can read his articles and books out there, you can find him very, very easily. And he had been teaching at a different university and then he joined a business school and what he found quite quickly. Is that even though there's enormous amounts of behavioral science and social psychology research done by academics, much of which would be incredibly useful in a business environment, business people tend to ignore this academic research in favor of. Tried and tested things over and over again in favor of listening to consultants promising solutions. And there's a sort of resistance to doing academic research or sharing ideas that might actually work in in business. And so ethical systems was created as a way to try and make some of these ideas and concepts more accessible to the business community. So in that role, that's one of my hats. But with that hat on, I think of myself as a translator between the academic world and the business world. And in fact, I think of myself as a translator in a lot of different contexts. Because I've worked also in ethics and compliance and in ESG and in questions more around culture and people. And I think it's very fascinating that there's such disconnects between these ideas and again, these kind of terminology gaps and weird lack of understanding.

07:28

Tessa Wernink

It sounds like you're also creating a new vocabulary, with your book as well. Um, so as you know, I work with Veronique Swinkels, or at least we spoke before about the Undercover Activist and how we're looking at employee activism. So bottom up change, what we call leadership. People calling businesses out, speaking truth to power, indeed being more challenging. Could you tell us what the role is that you see for employees in creating or maintaining ethical organizations?

08:57

Alison Talyor

Oh, I think it's completely essential. You don't have an ethical organization unless there's ethical decision making capacity throughout the workforce. You don't have an ethical organization by imposing rules from the top down. One of the biggest factors in making organizations less ethical is the widespread perception that there's impunity. So there are different rules if you're at the top versus you're at the bottom. For everybody else. Um, there's a reason we have speaking up lines and whistleblowing lines. That's because we know that very often this is pressure from senior people to meet targets to do things we shouldn't do. And so we need to provide people who have less power. the ability to speak up and raise concerns. So there's no ethical organization without employee participation, understanding, and belief that this is all real and not just some performance the senior leadership is putting on. The other thing I think that's really, really interesting is that organizations have in general designed and built speaking or whistleblowing lines. For a very, very, very specific purpose, which is so that employees can report on fraud and bribery and illegal activities. And so back to this question of what an ethical business is and isn't, I think one of the most interesting trends of the last decade, but particularly the last five years, is the organizational speaking up has completely transformed. Very, very often young people, they don't want to call the hotline and say, I'm worried my boss is. committing fraud, they want to call the hotline and say, I'm worried my boss is not valuing purpose. I worry my boss is not inclusive. I worry this organization doesn't care about climate change. I worry that I'm working somewhere that doesn't align with my personal values. So we've seen this huge expansion, I think, um, in what employees want in terms of raising their voice, making their opinions felt having a role in shaping the values and priorities of the organization. And I think a lot of organizations are not responding very well. I think a lot of organizations find all this very threatening and I think that's a huge part of why we see so much strategic leaking and so many employees taking to Twitter or going to the media. Because they've tried to drive change internally. People at the top aren't listening. And that's why we're seeing all this discourse kind of spilling out into places like Twitter. Yeah.

09:32

Tessa Wernink

Yeah. Interesting. And I'd like to hear whether like employee activism, as a concept, because it's something I spoke to Megan Reitz about - You might know her. She's says it's actually quite unchartered territory in academia. And I hear you also saying that companies aren't responding well, or maybe aren't trained. Megan says managers didn't go to business school and learn how to deal with Black Lives Matter or MeToo issues or things that are part of the context of business nowadays. What do you think?

12:06

Alison Talyor

Yeah, a lot, a lot of it's as simple as bad management, right? A lot of it's as simple as we don't necessarily tend to promote on technical skills or commercial success, not on being a good people manager. And then when things get very complicated around these topics, then I think a lot of managers feel very threatened. I have a really interesting discussion in my MBA class at Stern where I asked people, would you hire a whistleblower? And I set out this kind of theoretical situation where you've got two identical candidates, identical in every other way. This is obviously not a real scenario. One was a whistleblower, one wasn't, and I asked them, and you get really, really mixed reactions. So a lot of people will say, sure, it's great. And a lot of people will be honest and say, no, I find that threatening. I'm worried that that person is going to report on me or say something bad about me. So I certainly think inherently, this is very, very challenging. Inherently, especially if you're older and you've been brought up to believe that being a leader is about telling people what to do, setting incentives. All you need to do is sit back and let the money roll in. I think we are in the middle of a very profound shift in how we think about hierarchy and power in companies today. And I think that's playing out. So a lot of that is going on. I think at the same time, though, we've got a lot of debates And so one real question is: when do we need to involve every employee in a strategic decision? When will that just slow everything down? When will that cause endless conflict? When will that stop the organization meeting its commercial goals, which might be very important to some of these employees? So, You know, an organisation, a company, a corporation is not a democracy, right? So it's not that we can put everything to a democratic vote. Even if we could, that might not be the right thing to do, because that might not protect the views of a minority. So I think we've got a lot of conversations to be had yet to have rather about decision making and power and hierarchy. Who needs information? Who needs access to what? And how we can have better and healthier cultures? Where we really take advantage of employee voice and employee opinions as an asset without miring organizations in endless conflict over value. So I think it's hard to get right. The organizations I've met, and given that you're Dutch, I'll tell you this, that handle this really well tend to be Dutch banks. So, for example, Rabobank. As an ethics committee, and it's got members of functions. They have a very thoughtful process for deciding on ethical issues that I think is really best practice. But one of the things I think that makes it best practice is they have Young Rabo. So they have a number of junior employees sitting on this committee. So they get the lens of young employees. They get that representation. And I think that's one example of a thoughtful way to manage these challenges. But I agree, there's very limited academic research on the issue of Megan rights being a notable exception. And we're really, I think, just starting to explore what these bigger questions really imply. So fascinating time for your work really, Tessa.

12:52

Tessa Wernink

Thank you. It's really nice to listen to you talk about this complexity because indeed, what is the threat? Is it a threat of like power? and somebody taking my leadership, is it a threat of business? Maybe a downturn if we let people decide. So in that sense, this idea of systems thinking that you also bring in through ethical systems is incredibly important. Could you elaborate a little bit on how systems thinking helps when it comes to dealing with this complexity?

16:17

Alison Talyor

Sure. So, I mean, just to get really simple about it, right, we have this notion in the legal system and of corporate personhood. And actually, a lot of the way that we think and talk about corporations is as if they are individuals. We talk about what they say with that they think. They think, they do, as if they're people, as if an organization is a single person with a single brain and a single goal to just maximize shareholder value. And I think we lose so much understanding by using that metaphor that a corporation is a person. For example, you'll hear a lot of concern out there about corporate hypocrisy and people talking about corporations lying and being dishonest. Now that's a real issue. I'm not saying it isn't, but the notion that there's a singular brain in there deciding to be a hypocrite is not in fact what's happening. Very often an organization ends up appearing extremely hypocritical. Just because two different departments or two different leaders haven't coordinated and haven't made a decision and haven't decided what to do. There's also this idea that if it's a single person, it will have a single goal that needs to be imposed from the top down the corporate end. Personhood, in fact, is an abstraction and employees are seen as a cost. They're seen as a threat to that entity, that singular entity's value creation. So all these metaphors just hide a lot more than they reveal and they stop us seeing the truth, which is that an organization is a system. It's co-created. And so, because we talk and think about organizations as a singular and a person, we can't really talk about what would make the system work better, and we don't understand that an organization is a system within wider systems. So, for example, the climate or a social environment is going to be relevant to what goes on in an organization. Diversity and inclusion dynamics, of course, mirror what's going on in society. So, treating a corporation as a singular, self interested, psychopathic person means we can't even see problems, let alone start to solve them.

16:46

Tessa Wernink

Yeah, and the other thing that you bring in, in that sense, is this psychological safety, and this is what I noticed a lot with people who stand up for what they believe in, is that they're heard in a way that they might be against something, or protesting, but actually a lot of it is what they're for. So, there's a lot of emotion, like we say activism is love made visible, and somebody said, yeah, love is, I'm uncomfortable with love, but love in business just doesn't work. Um, so I was wondering, like, how do you bring in the psychology then? Like, is that, is it also that companies can grow or develop in a way that they can hear these voices better?

19:04

Alison Talyor

So, I think psychology shows up in in many, many ways, but I mean, the kind of psychology I'm interested in an ethical systems is interested in is group psychology is the study of how people behave in teams and groups, which is a very different discipline from a study of how individuals think and behave. And so. I think that by thinking about how people act and think in systems, we can get, a huge amount more insight into what's going on.

19:43

Tessa Wernink

If you see employee activism as voices of difference that are internal, that are actually amplifying what's happening outside, the companies, do you see a big difference between where you work in America, like, in terms of the kinds of topics?

20:15

Alison Talyor

My understanding is that employee activism is much more advanced in America or much more of an issue in America than anywhere else. It's certainly happening in other places, but I've spoken to lots of people in Europe who aren't seeing it manifest in the same way. Here, we've had a lot of very overt employee rebellions. They started in Silicon Valley. They started in places like Google, Amazon, Uber, Base camp. There are lots and lots of examples of employees, you know, leaking, damaging information, complaining about what's going on. A lot of this escalated in the aftermath of George Floyd's murder. And that resulted in corporations putting out a lot of diversity and inclusion statements about racism. And then in black employees internally saying, well, you might be saying this, but this is what it's like to work here. And I'm going to share these views. So. There's a very particular conversation about diversity, equity and inclusion in the US, and I think there's more, um, more contention, maybe over these questions of strategy and direction, things like CEO pay is much, much higher in the US, more perceptions of inequality, more perceptions, maybe that the companies are too still too focused on shareholder value. So. I’m very interested to see how this will play out in other ways. I don't know if the reason there's so much more in the US is because management isn't responding very well to this rise in employee voice. In somewhere like Europe, there is a bit more inclusion. There is also a bit more sense of collective decision making already. So you don't see so much contention. I don't actually know the underlying cause, but it's, it's very, very interesting to look at the variation.

20:32

Tessa Wernink

And is, are worker rights, because in Europe there's obviously been a lot of labor unionization and et cetera, like a hundred years ago, or a hundred years of that past, do you think that that has an influence?

22:12

Alison Talyor

It probably does. I mean, it's very interesting to see how pro union my young students are after, you know, when I was young, this was not seen as a thing that was going anywhere. So we're certainly in a new era for workers rights. And I think that's for a very good reason. If you look at executive pay, there's very strong evidence that gains are not being shared equitably. And, something's got to give if you keep going far enough, something in the end has got to give.

22:26

Tessa Wernink

xxxx So two more questions. I think one is, do you have any kind of favorites? like you mentioned the Rabobank, which it was a cooperative the way it started of course, as well as maybe there was some history there. Any great examples of businesses or even like movements outside businesses that you would like to share?

22:56

Alison Talyor

There's corporations, I think Novartis is doing a lot of really great thinking on these, wider topics of ethics and voice and culture. But another organization I would really love to highlight is called Re-generation Canada. That was formed by a bunch of ex McGill students. They have a whole employee activism toolkit you can download that talks about how to do research, how to engage leaders on these topics, how to think about sustainability. They're extremely smart and extremely interesting young people, and they're getting a ton of momentum. Another organization I really like is called Clean Creatives. And that's trying to organize people in PR and advertising and media to drive their employers specifically to be more responsible on the work they do on climate change and for oil and gas firms. So yeah, there's a lot of really cool organizations out there. And then there's your own Tessa, of course.

23:18

Tessa Wernink

Thank you. Um, do you have any nuggets of wisdom or gifts? for employee activists listening here and do's don'ts things to think of?

24:16

Alison Talyor

I think it's just really important to think about inclusion. I think it's really important to, um, make your individual views felt. I think it's very important to be thoughtful about what you're pushing your employer to do and what the unintended consequences of, of that might be. So, Keep going. You are driving a huge amounts of change. There are enormous shifts going on in questions of hierarchy and power. There is a bigger conversation to be had about the role of business in society, and in particular, how it should use its political influence and leverage. And I don't think employee activism is a sustainable substitute for a pressure on business to do things like spend less money on lobbying against employees interests. I think we need to look at campaign finance. I think we need to look at corruption. So rather than just, and this is probably aimed mainly at US listeners, but rather than just accepting business is going to be interfering in politics and trying to make it interfere in a good way. Maybe what we need to do is to re-engage with the political process and get our corporations back in the more limited role in society. Maybe they should and shouldn't have. Let's at least have that conversation. Yeah.

24:29

Tessa Wernink

Great. Are you optimistic about the future? Yes.

25:45

Alison Talyor

I'm optimistic about the future of leadership because of what I see in the classroom every day.

25:49

Tessa Wernink

Thank you so much for taking the time. I know you're busy. And I'm wishing you the best for the holidays to come. Thank you so much, Alison, for being here.

25:55

Alison Talyor

Thank you so much for having me, Tessa.

26:06